Upload
chelsa
View
30
Download
0
Tags:
Embed Size (px)
DESCRIPTION
What are Chinese looking for with Technology? - A User, Government, and Business Perspective. Dolcera Webinar Series. Dolcera. Dolcera is a k nowledge s ervices company based out of Silicon Valley-CA, Bellevue-WA, Chicago-IL, London-UK, Beijing-China, and Hyderabad-India - PowerPoint PPT Presentation
Citation preview
What are Chinese looking for with Technology?- A User, Government, and Business Perspective
Dolcera Webinar Series
• Dolcera is a knowledge services company based out of Silicon Valley-CA, Bellevue-WA, Chicago-IL, London-UK, Beijing-China, and Hyderabad-India
• Dolcera works with over 100 innovative companies across the Americas, Europe, and Asia.
• We are a proud team of 110 engineers and business analysts with expertise in telecommunication, semiconductors, software, servers, data analytics, chemistry, packaging, food technology, biotechnology, biochemistry and pharmaceuticals
• Dolcera is helping its clients stay innovative by providing them information related to • Business Strategy (Business research, and innovation strategy formulation)• Intellectual Property (Engineering services) and • Visualization tools (Dashboard 2.0)
Dolcera
Dolcera
China's first lady Peng Liyuan taking pictures with a Nubia Z5 Mini from ZTE Corporation; 13-mega-pixel camera; costs about $240/-
Source: http://www.chinadaily.com.cn
Agenda
1. China Size, migration patterns, influencers
2. The Chinese Consumer Profile, Expectations, Sensitivities
3. The Chinese Government Strategy Why did the Chinese Government choose TD-LTE? Evolving role of foreign players in China’s eco-system
4. The Chinese Corporation Will Chinese companies play in the global eco-system?
5. Take-aways from this Webinar Understanding and succeeding in the Chinese technology eco-system
1. China
1. China (1 of 3)
China’s sheer size and population positions it as one of the key markets in the world today.
Country Overview
• China is expected to overtake the USA to become the world’s largest economy by 2017.
Population: 1,350,700,000
GDP: $13.37 trillion
Average Salary: $730 /month
Capital city: Beijing
Language: Standard Mandarin
Currency: Renminbi (yuan) ¥ http://english.gov.cn https://twitter.com/china
Links:
• China has the biggest population in the world (x4 times USA).
• The biggest city in China is Shanghai with an urban population of 20 million (comparable to Florida’s population).
Urbanization, infrastructure, and a booming middle-class will drive technology adoption.
Growth of ‘Mega’ Cities ‘Mega’ Cities = ‘Smart’ cities
2014 2020
The ‘rising’ urban middle class More money to buy luxury products
8 mega cities with population >10 million by 2025; over $15 Billion infrastructure investment by 2015.
70% (~1 billion) of the Chinese in cities by 2030 with close to 3 times more $$ to spend.
1. China (2 of 3)
The Chinese people and the Chinese Government play a role in technology “success”.
1. China(3 of 3)
• China has the largest number of internet users (618 million) and about 80% of them use mobile internet.
• Nearly 50% of urban Chinese own and use a smart-phone 25 hours a week.
• Top uses of smartphones are search, news, texting, social networks, gaming, and online buying/mobile payment transactions.
Source: GSMA Intelligence: Half a billion Chinese citizens have subscribed to the mobile internet,
World’s largest mobile market
• China technology R&D in 2013 second only to the US.
• “Only if core technologies are in our own hands can we truly hold the initiative in competition and development”- President Xi Jinping, June 2014
• Patent application subsidies for domestic players led to explosive growth in filing
• Stricter enforcement of Regulatory and Anti-monopoly issues in the since 2011.
Push for “indigenous innovation” and IP, Regulatory Enforcement
Wireless Eco-system Players In China
Service ProvidersInfrastructure
Equipment Providers
Chipset VendorsTerminal Device
Vendors
2. The Chinese Consumer
Chinese smartphone users are power users with high-speed data requirements
2. The Chinese Consumer(1 of 3)
• Internet users spend an average of 25.9 hours online every week.• CNNIC credits this to more Wi-Fi access, maturity of 3G coverage and 4G access.
Instant Messaging,
Social networks
Online News
Mobile Searching
Music & Video
Online shopping
and payments
Gaming
Chinese use their smartphones several times a day, for data intensive tasks
Average age of a Chinese smartphone user is 25 years. 77% of users have a data plan that costs about $20 monthly. Chinese on an average own ~1.7 devices per person.
Chinese smartphone users look for sleek, stylish, feature-rich handsets
- 5.5-inch 2K Quad HD, 538 PPI & 16 Megapixel OIS rear camera 3GB DDR3 RAM and 32GB ROM (Internal Memory).
- Qualcomm Snapdragon 805 processor with 2.5GHz Quad-core CPU.
- Support GSM, 3G WCDMA, 4G FDD-LTE network.
- Dual Cameras: Front:5.0MP Back 13.0 mega pixel/Auto Focus.
- Snapdragon APQ8064 Quad Core 1.5 GHz
- Dimensions: Size (LWH): 2.59 inches, 0.41 inches, 5.31 inchesWeight: 5.6 ounces
- Built In GPS & A.GPS Dual sim dual standby, WCDMA+ GSM, Wi-Fi:IEEE 802.11 b/g/n, supports Wi-Fi hotspot
- 8MP rear camera, 1.3MP front camera
- MTK MT6577 1.2GHz processor, GPU: PowerVR SGX531; - Android 4.1.9 OS
- Support GSM & WCDMA 3G network
- Support WiFi, Bluetooth, GPS.
Xiaomi Mi4 ZTE Nubia Z5 Mini Samsung Galaxy S3
2. The Chinese Consumer(2 of 3)
The trend is towards buying ‘cool’, affordable smartphones more often.
• Chinese prefer domestic, lower priced smartphones.
• Lower prices has caused pre-paid and non-contract phones to become more popular.
Local brands are more popular than ever
• Android is still the most popular operating system for smartphones, and phones are now replaced every 15 months.
Affordability has led to faster replacement
2. The Chinese Consumer(3 of 3)
3. The Chinese Government Strategy
Wireless standards that shaped the eco-system in China
GSM, CDMA
FDD-LTE,TD-LTE
WCDMA
TD-SCDMA, WCDMA
TD-LTEGSM, CDMA
In China,• The government issued 4G
spectrum licenses for TD-LTE in December 2013 (3 networks so far). No timeline for FDD-LTE.
• Similar trend seen in 3G when spectrum licenses were issued for the local standard TD-SCDMA before WCDMA.
World-wide,• As of May 2014, 288 LTE
networks in 104 countries, among which 36 LTE TDD networks in 24 countries.
Source: CommScope
3. The Chinese Government Strategy (1 of 11)
Why did the Government pick TD-LTE?
TD-LTE is believed to help enhance the position of domestic players in the eco-system.
TD-LTE license enhanced China Mobile’s dominance
62.0%23.0%
15.0%
Users' market share 2014 (end of 1st quarter)
China mobileChina Unicom China Telecom
• China Mobile leads with 62% Chinese mobile service users, more than half revenues of three carriers, and 4 times profits of China Unicom and China Telecom.
• All 3 are state-owned.
Huawei & ZTE top TD-LTE infrastructure suppliers for China Mobile
• TD-LTE equipment providers’ biggest customer is China Mobile.
• In 2014, China mobile will construct 5,00,000 4G base stations (60% global volume), offer 4G in 340 cities and 100 million 4G terminal devices.
• Chinese domestic manufacturers led by Huawei & ZTE account for about 70% market share.
3. The Chinese Government Strategy (2 of 11)
Why did the Government pick TD-LTE?
• Over 100 operators are investing in the technology.• Infrastructure investments expected to grow at 15% over the next 6 years.• TD-LTE device shipments will surpass 100 Million in 2014 alone.• Large scale adoption will drive integrated LTE eco-system, and impact Advanced LTE & 5G.
Picking TDD LTE: Long-term advantages to China
TD-LTE is seeing increasingly strong adoption worldwide
Huawei currently leads the TD-LTE infrastructure market share and is expected to be tough competition to Ericsson in the global market.
Source: ReportsnReports.com report The TD-LTE Ecosystem: 2014 - 2020 - Infrastructure, Devices, Subscriptions & Operator Revenue, Qualcomm
3. The Chinese Government Strategy (3 of 11)
Why did the Government pick TD-LTE?
Dolcera IP Study to validate the ‘domestic’ advantage hypothesis
Used the Dolcera ETSI Disclosures database to find all LTE disclosed patents, and found CN patents. 9,087 Chinese patents extracted from 31,779 patents worldwide.
Our subject experts used keyword, assignee, inventor based searches to identify additional patents related to LTE. 22,692 additional CN LTE patents found.
Used Dolcera’s PC 1.0, an innovative supervised automation tool that uses machine learning to classify patents to tag CN LTE patents to TD-LTE, and FDD-LTE.Of 9,087 patents, 2,068 patents tagged to TD-LTE. ~6,700 were agnostic.
Analyzed and interpreted trends related to domestic and foreign players in the LTE space.
3. The Chinese Government Strategy (4 of 11)
Why did the Government pick TD-LTE?
• Based on Dolcera’s analytics on the ETSI Standards database, Qualcomm and Samsung own the most number of SEP patents in LTE world-wide.
• The number of domestic players in China that have disclosed to ETSI is small; led by Huawei and ZTE.
IP: There are more TD-LTE patents that domestic players own than FDD-LTE patents
Few domestic players hold SEP patents; proportion of TD-LTE patents is more.
Mediatek Inc
Huawei
Zte Corp
CATT
0 10 20 30 40 50 60 70 80 90
1
37
62
80
0
6
1
0
TDDFDD
Number of Patents/Publications
TD-LTE and FDD-LTE IP of top Chinese playersDistribution of CN Essential LTE IP
Foreign 79%
Domestic21%
Please note that no reassignment information on Lenovo acquired SEP patents related to LTE from NEC in April 2014 was available, and hence not included.
3. The Chinese Government Strategy (5 of 11)
Why did the Government pick TD-LTE?
‘Foreign’ companies play a significant role in chipsets, and terminal Devices (Smartphones).
3. The Chinese Government Strategy (6 of 11)
Evolving role of foreign players in China’s eco-system
Service ProvidersInfrastructure
Equipment Providers
Chipset VendorsTerminal Device
Vendors
Qualcomm, a foreign player and Mediatek, a domestic player are major chipset vendors.
Baseband/Apps processor Revenue Share, 2013
Baseband share at Chinese domestic smartphone OEMS (2013)
Source: CLSA
• Qualcomm leads the LTE market; supports multiple LTE frequencies with WCDMA and CDMA compatibility.
• Samsung, Apple, Xiaomi are players in China that rely on Qualcomm for baseband ICs or baseband/app processors.
• Qualcomm has 69% revenue share, while Mediatek has a 14% revenue share in the Chinese handset market. Chinese players like Spreadtrum and Leadcore have less than 1% revenue share.
• In 2013, Mediatek had almost double the market share of Qualcomm in shipments to Chinese vendors.
Qualcomm leads revenue share in chipset market
Mediatek dominates in the low-end domestic market
3. The Chinese Government Strategy (7 of 11)
Evolving role of foreign players in China’s eco-system
Use of low-priced domestic phones on the rise; high-end ‘foreign’ phones still popular.
Smartphone market is crowded, with a large number of domestic players
• Over 100 million smartphones were shipped in China in Q1 2014.
• Apple, Samsung, HTC are the only foreign players in the top vendors list.
• About 10% of phones shipped were 4G enabled, and over 70% were 3G enabled handsets.
• About 27 million phones cost > $500; 80% of which were iPhones. • 57% phones cost less than $330.
1 in every 4 Chinese buy phones that are priced over $500
3. The Chinese Government Strategy (8 of 11)
Evolving role of foreign players in China’s eco-system
While most of top IP holders in China are ‘foreign’, a few domestic players file aggressively.
2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
10,000
20,000
30,000
40,000
7,48510,55112,121
13,33116,578
21,03222,397
26,056
35,58036,995
Publication year
No
of p
aten
ts
Wireless: Patent filing trend in China
Top IP holders in China: Wireless• The number of CN patents filed has exploded in the last 10 years.
• The top assignees include mostly foreign companies with the exception of Huawei & ZTE.
ZTE Corp
Huawei Technology
Qualcomm Inc
Samsung Electronics
NOKIA Corporation
Ericsson
LG Electronics
CATT
InterDigital Technology Corp.
NTT Corp
0 1000 2000 3000 4000 5000
3835
3585
3416
1618
1523
1261
1132
1004
884
876
Number of CN LTE patents and published applications
Foreign players currently hold more IP than domestic players in China
3. The Chinese Government Strategy (9 of 11)
Evolving role of foreign players in China’s eco-system
The use of Anti-Monopoly Law (AML) by the Government and Licensing IP (SEP) in China.
• China’s anti-monopoly law which took effect in 2008 has been recently enforced to launch probes on multiple companies, including foreign players like Qualcomm, Microsoft etc.
AML enforcement increase
Recent ruling impacting issues related to antitrust law and IP licensing of SEP• In April 2014, the Guangdong High Court of China published its October 2013 judgments in two
Huawei Technologies v. InterDigital cases. • One held that U.S.-based InterDigital (IDC) abused its dominant market position by
refusing to license standard essential patents (SEPs) for 3G wireless communication devices on fair, reasonable and non-discriminatory (FRAND) terms.
• The other set a FRAND rate capped at 0.019 percent of the actual product selling price for IDC to license its Chinese SEPs to Huawei.
3. The Chinese Government Strategy (10 of 11)
Evolving role of foreign players in China’s eco-system
China is a key market. Many foreign brands have been successful, yet challenged in China.
• Apple’s Q1 2014 revenue from Greater China, which includes Hong Kong and Taiwan, rose 13% from a year earlier to $9.3 billion.
• Over 75% of phones > $500 are iPhones.
• China is an important market on a global stage, and some companies have been more successful than others.
China is a key market; a challenge
The ‘brand’ helps Apple gain in China
Localization key to Samsung’s success in China
Most popular smartphones in China: April 2014
• Freebies, local language, localized apps. • Understanding the micro trends within each
region and localizing.• Use of the number ‘8’ and ‘red’ in Samsung
advertising in China
3. The Chinese Government Strategy (11 of 11)
Evolving role of foreign players in China’s eco-system
3. The Chinese Corporation
Lenovo’s M&A driven expansion to become a ‘global’ brand.
2. The Chinese Corporation (1 of 3)
Will Chinese companies play in the ‘global’ eco-system?
• Lenovo is the 2nd largest domestic player in smartphones in China.
• Enhanced its IP portfolio, and reach in the Americas through acquisition of Motorola in 2014, and NEC patents in April 2014.
• International workforce of 27,000 employees and customers in more than 160 countries.
• Enjoys substantial advantages of scale, supply chain and costs that enable it to compete profitably using a margin-based hardware model.
Lenovo + Motorola + IBM = Global brand
Xiaomi: The Chinese domestic giant is ready to take on the world.
Affordable smartphones
• Xiaomi's flagship devices, the Mi 3 and 4, are clearly "inspired" by Samsung's Galaxy S5 and Apple's iPhone 5s, but costs $230; the iPhone costs $750 in China.
• Razor thin margins, direct consumer sales, online only presence, minimal inventory help keep costs down.
Quality hardware, customized Android experience• The Mi 3 runs on a 2.3 GHz Qualcomm Snapdragon processor, has 2GB of RAM, and a 13-
megapixel camera. • Its customized version of Android has china specific applications as default.
Going Global• By 2015, Xiaomi plans to expand into India, Brazil, and Russia as well as Indonesia, Malaysia,
Mexico, the Philippines, Thailand, Turkey, and Vietnam. Xiaomi is already selling phones in Mainland China, Hong Kong, Taiwan, and Singapore.
2. The Chinese Corporation (2 of 3)
Will Chinese companies play in the ‘global’ eco-system?
Xiaomi is building its patent portfolio to be a global player.
• The Chinese Government provides subsidies for patent filing, and there is a push for “Invented in China”.
• Xioami, for instance, has built up a portfolio of over 1000 CN patents since 2010.
CN; 974
EP; 5JP; 5
KR; 6US; 33
WO; 65
Xiaomi's portfolio distribution
Communication Control/Connectivity
Information retrieval/Database structures/File system structures
Mobile Terminal Function/features
Digital Signal Processing
UI
0 50 100 150 200
88
96
116
123
188
Top Areas of Filing
Number of Patents/Publications
China Government subsidies push domestic players to build IP strength
2010 2011 2012 20130
100200300400500600700
374
341
654
Priority Year
Num
ber o
f pat
ents
/Pub
lica-
tions
Xiaomi's filing trend
2. The Chinese Corporation (3 of 3)
Will Chinese companies play in the ‘global’ eco-system?
Key Take-aways from this Webinar
Intelligence and local due-diligence are key for foreign player success in China.
Key Take-aways from this Webinar
Get ready for China
Commercialize in China
Sustain in China
Consumer Understanding &
Segmentation
Market and IP Due-diligence
Product Innovation for China
Brand positioning
Competitive Intelligence IP Strategy
Market & Business Intelligence
IP Licensing & Litigation
Buy or Partner
Success in China comes from understanding local trends and environment.
Dolcera can help with strategic due-diligence during all phases of the business life-cycle.
Intelligence on the Chinese landscape will become ever critical for any ‘global’ player.
Key Take-aways from this Webinar
As China’s domestic giants are expand globally rapidly, it is important to know them!Dolcera’s presence in China adds a local perspective unavailable otherwise.
Primary Research for user, market, and IP trends.
Customized, and current information in a fast paced emerging market.
An Integrated approach to market analysis with a local and world view for effective decisions.
IP Litigation, domestic player analysis and in-depth reviews not available easily outside.
Assessment of Chinese patent literature and other local sources in native Mandarin.